Nicosia, Cyprus
— Israel's sudden extension of its control over the Golan Heights brings it into sharp conflict with its most hard-line Arab neighbor and throws the policies of the more moderate Arabs into a tailspin.

Saudi Arabia will have to soften or altogether abandon its advocacy of an Arab strategy containing an implicit call for recognition of Israel. And Egypt's already-stalemated autonomy talks with Israel over the future of the Israeli-occupied territories are likely to stall out completely.

The Israeli Knesset Dec. 14 adopted a bill sponsored by Prime Minister Menachem Begin's Likud Party, placing the Golan Heights under Israeli civil law. Mr. Begin argued that ''for generations the Golan Heights were part of the land of Israel.'' He said the act -- which amounts to virtual annexation -- would ensure Israeli military control of the strategic highlands.

The action has drawn sharp response from the Arab world. Most particularly, it appears to be causing a closing of ranks behind Syria. The Golan Heights were part of Syria until captured by Israel in 1967. Centered on Mt. Hermon, the rugged Golan region dominates the plain leading to Damascus and controls the water source of dozens of rivers and streams in the parched Levant.

Though Syria has a formidible armed force with 240,000 troops, strategists say it is in no position to challenge Israel's hold on the Golan directly. But the Syrian contention that military muscle, not diplomacy, is the only way to deal with Israel may be strengthened.

''The Golan is Syrian-Arab territory which has been occupied by Israel,'' Egyptian Foreign Minister Kamal Hassan Ali said. ''If Syria were to participate in the negotiating process in the future, what would they discuss other than the restoration of the Golan lands and nothing else.''

Still, Egypt can point to its reacquisition of territory similarly lost to Israel in 1967 as proof that negotiation -- not confrontation -- is the way to win back Arab land.

Egyptian President Hosni Mubarak reaffirmed Dec. 15 he is committed to Camp David. But with a unilateral Israeli move that Egypt sees as a ''blatant violation'' of Camp David, negotiations over the future of occupied territory may bear little fruit. Mr. Mubarak indicated that Egyptian-Israeli talks would continue -- an attitude Western diplomats see as necessary for Egypt to maintain at least until Israeli vacates the last portion of Sinai next April.

For Saudi Arabia, however, the process of rationalization may be difficult, if not impossible. In the past year Saudi Arabia has jockeyed to lead the Arab world through moderate diplomacy.

It was a partner with the United States in delicate, secret negotiations quelling the Syrian-Israeli ''missile crisis'' in Lebanon last spring and the Palestinian-Israeli border flare-up last summer. The eight-point Fahd plan grew out of this successful diplomacy as an attempt to parlay cease-fire into long-term resolution of the Arab-Israeli conflict.

The plan -- and Saudi diplomacy -- suffered a major though not fatal setback in late November when Syria could not be brought to a summit conference in Fez, Morocco, to discuss it. With this latest Israeli move, moderation toward Israel may be even more difficult for the Saudis to counsel.

By discreetly stepping back, the Saudis let Syria take the lead -- and a radically confrontationist role toward Israel. One Western Mideast analyst points out this may allow Israel to dodge the sticky question of how it would handle the Fahd plan -- and instead give it an old familiar role of facing down Syria.

Such a development seemed to be signaled Dec. 15 by Syria's government-owned newspaper al-Thawra. It said the Israeli move on the Golan had ''shut the door in the face of moves for establishing a just and durable peace'' and promised Syrian retaliation.

Such retaliation, analysts believe, would be unlikely to occur in the form of a Syrian assault. More likely, it is thought, would be an increase in guerrilla activity inside territory Israel controls.

Of all the Arab territory occupied by Israel, the Golan has been the most peaceful. The largely Druze population has been cultivated by the Israeli government as a counterweight to the Palestinians of Israel proper, the West Bank, and Gaza. Many Druze hold Israeli identity cards.

A Syrian campaign could alter the peace of the region, but it may not generate the kind of local resistance that the Palestinian cause is able to generate on the West Bank.